NIIF’s debt platform gets $800-mn booster dose
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The Indian government will make an equity infusion of Rs 6,000 crore ($803.5 million) in the debt platform of the National Investment and Infrastructure Fund (NIIF) to finance infrastructure projects.

The infusion is part of the third set of stimulus measures the government rolled out on Thursday to revive the coronavirus-hit economy.

NIIF ventured into debt financing by acquiring a majority stake in non-bank lender IDFC Ltd’s infrastructure fund business in October 2018. The deal involved the purchase of IDFC Infrastructure Finance Ltd, which was renamed as NIIF Infrastructure Finance Ltd.

The IDFC deal was NIIF’s first control transaction and also the first investment from its strategic opportunities fund. The opportunities fund has set up an infrastructure credit platform comprising a debt fund under NIIF Infrastructure Finance and non-banking finance company Aseem Infrastructure Finance Ltd.

NIIF Infrastructure Finance provides long-term debt to operating infrastructure assets that have completed at least one year of commercial operations. Aseem Infrastructure lends to assets in different phases of implementation.

According to a government presentation after the announcement of the stimulus, the NIIF’s debt platform will leverage the fresh equity infusion to provide project financing of Rs 110,000 crore by 2025 under the National Infrastructure Pipeline. NIIF Infrastructure Finance and Aseem Infrastructure will raise Rs 95,000 crore in debt from the market, including project bonds, for this purpose.

NIIF has already made an equity infusion of Rs 2,000 crore into its debt platform, according to the presentation. Rest of equity—about Rs 7,000 crore—will be raised from private investors, the presentation said.

The debt platform has a loan book of Rs 8,000 crore and a deal pipeline of Rs 10,000 crore.

Apart from the strategic opportunities fund, NIIF also invests out of a Master Fund and a Fund of Funds. Overall, the NIIF manages $4.3 billion of equity capital commitments across the three funds.

The actual investments made by the three funds in downstream funds, platforms and operating companies is Rs 19,676 crore, the presentation showed.

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